Europe Referendum….it’s all over!24 June 2016
The spring of 2016 has been dominated by the lead-up to the 'In/Out' EU Referendum, with both sides eagerly sharing their views. Each camp has their reasons for subscribing to their outlook and it has been interesting to note the variance in views between large and small businesses and individuals alike.
Now it's all over we can move forward, but will it make a difference? Simplistically, there may be some short term volatility in the value of sterling and as we approach the holiday season that may make a difference to the amount that can be received when exchanging pounds for Euros and Dollars, as examples. Time will tell how investment and trade markets will react to the result and the implications of this in the medium to longer term.
The current UK inflation target is still 2.0% from the Bank of England and reaffirmed annually, so inflation is expected to rise anyway and will erode the real value of pensions into the future. Inflation is not invariably a bad thing, however stagflation and deflation are usually poor alternatives for economies, especially over a longer period.
I think we will see some further decline in UK equities and European capital values, however, in the global picture, there is more to focus on, such as oil prices and the political situation in the US, amongst others. I do anticipate some volatility in pension and investment holdings, but we as a company have suggested this anyway for 2016. Therefore, for well diversified holdings, we expect balanced gains and falls.
As indicated above, there are other important votes due in 2016, in particular the US Election, which may have greater focus for investment markets as we draw towards the end of 2016. It is also of note that at the time of writing, oil prices have risen to over $50 a barrel. Not such good news at the petrol pumps, but possibly better news for investment markets into the medium term.
Keeping your financial planning under review over 2016 and beyond will be well worthwhile as political processes change the economic geography into the future.
If you would like to review your financial planning then please let the team at Chapters Financial Limited know at either our Guildford or Woking offices.
Past performance is not a guarantee of future performance. Fund values can fall as well as rise and are usually not guaranteed.
No individual advice is provided during the course of this Blog.
Keith Churchouse FPFS
Chartered Financial Planner
CFP Chartered FCSI
Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899